China Hydroelectric (CHC)

Unfunded
Escrow. Until such time as the Unfunded Escrow is reduced to
zero Dollars, portions of the Unfunded Escrow shall be funded (thus permanently
reducing the Unfunded Escrow) from time to time from (a) Loans made available
due to any incremental increase in the Revolving Credit Limit from and after the
date hereof in accordance with the definition of such term, (b) Loans made
available due to any incremental increase in the Term Loan Limit from and after
the date hereof in accordance with the definition of such term, (c) any funds
that would have otherwise been released from the Bond Stabilization Escrow
Account that are required to be used to fund the Unfunded Escrow in accordance
with the terms of the Stabilization Escrow Agreement, and (d)

interest
accrued and payable from time to time on the then outstanding principal balance
in the Bond Stabilization Escrow Account.

Section
2.
Representations and
Warranties. The Borrowers and Guarantors, jointly and
severally, represent and warrant to the Lenders, the Swingline Lender, the
Issuing Bank and the Administrative Agent as of the date of this Second
Amendment that: (a) no Default is in existence from and after, or will result
from, the execution and delivery of this Second Amendment, or the consummation
of any transactions contemplated hereby; (b) each of the representations and
warranties of the Borrowers and the Guarantors in the Loan Agreement and the
other Loan Documents is true and correct in all material respects on the
effective date of this Second Amendment (except for representations and
warranties limited as to time or with respect to a specific event, which
representations and warranties shall continue to be limited to such time or
event); and (c) this Second Amendment and the Loan Agreement are legal, valid
and binding agreements of the Borrowers and the Guarantors and are enforceable
against them in accordance with their terms.

Section
3.
Ratification. Except
as hereby amended, the Loan Agreement, all other Loan Documents and each
provision thereof are hereby ratified and confirmed in every respect and shall
continue in full force and effect, and this Second Amendment shall not be, and
shall not be deemed to be, a waiver of any Default or of any covenant, term or
provision of the Loan Agreement or the other Loan Documents. In
furtherance of the foregoing ratification, by executing this Second Amendment in
the spaces provided below, each of the Guarantors, on a joint and several basis,
hereby absolutely and unconditionally (a) reaffirms its obligations under the
Guaranties, and (b) absolutely and unconditionally consents to (i) the execution
and delivery by the Borrowers of this Second Amendment, (ii) the continued
implementation and consummation of arrangements and transactions contemplated by
the Loan Agreement (including, without limitation, as amended or waived hereby)
and the other Loan Documents, and (iii) the performance and observance by each
Borrower and each Guarantor of all of its respective agreements, covenants,
duties and obligations under the Loan Agreement (including, without limitation,
as amended hereby) and the other Loan Documents.

Section
4. Conditions
Precedent. The agreements set forth in this Second Amendment
are conditional and this Second Amendment shall not be effective until receipt
by the Administrative Agent of a fully-executed counterpart of this Second
Amendment.

Section
5.
Counterparts. This
Second Amendment may be executed and delivered in any number of counterparts
with the same effect as if the signatures on each counterpart were upon the same
instrument. Any counterpart delivered by facsimile or by other
electronic method of transmission shall be deemed an original signature
thereto.

Section
6.
Second
Amendment as
Loan Document. Each party hereto agrees and acknowledges that
this Second Amendment constitutes a “Loan Document” under and as defined in the
Loan Agreement.

Section
7. GOVERNING
LAW. THIS FIRST AMENDMENT SHALL BE DEEMED TO CONSTITUTE A
CONTRACT MADE UNDER THE LAWS OF THE STATE

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OF
NEW YORK, INCLUDING ARTICLE 5 OF THE UCC, AND SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD
TO ITS CONFLICTS OF LAW RULES).

Section
8. Successors and
Assigns. This Second Amendment shall be binding upon each of
the Borrowers, the Guarantors, the Lenders, the Swingline Lender, the Issuing
Bank, the Administrative Agent, the Agents and their respective successors and
assigns, and shall inure to the benefit of each such Person and their permitted
successors and assigns.

Section
9. Headings. Section
headings in this Second Amendment are included herein for convenience of
reference only and shall not constitute a part of this Second Amendment for any
other purpose.

Section
10. Expenses. Each
Borrower jointly and severally agrees to promptly reimburse the Administrative
Agent for all expenses, including, without limitation, reasonable fees and
expenses of outside legal counsel, such Person has heretofore or hereafter
incurred or incurs in connection with the preparation, negotiation and execution
of this Second Amendment and all other instruments, documents and agreements
executed and delivered in connection with this Second Amendment.

Section
11. Integration. This
Second Amendment contains the entire understanding of the parties hereto and
with any other Lenders and parties to the Loan Agreement with regard to the
subject matter contained herein. This Second Amendment supersedes all
prior or contemporaneous negotiations, promises, covenants, agreements and
representations of every nature whatsoever with respect to the matters referred
to in this Second Amendment, all of which have become merged and finally
integrated into this Second Amendment. Each of the parties hereto
understands that in the event of any subsequent litigation, controversy or
dispute concerning any of the terms, conditions or provisions of this Second
Amendment, no party shall be entitled to offer or introduce into evidence any
oral promises or oral agreements between the parties relating to the subject
matter of this Second Amendment not included or referred to herein and not
reflected by a writing included or referred to herein.

Section
12. Jury Trial
Waiver. THE BORROWERS, GUARANTORS, ADMINISTRATIVE AGENT AND
LENDERS BY ACCEPTANCE OF THIS FIRST AMENDMENT MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
FIRST AMENDMENT, THE LOAN AGREEMENT, OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO
BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF ANY AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION
OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, ARISING OUT OF TORT, STRICT
LIABILITY, CONTRACT OR ANY OTHER LAW, AND

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AGREE
THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.